Last week saw the newest quarterly earnings release from Copperleaf Technologies Inc. (TSE:CPLF), an important milestone in the company's journey to build a stronger business. The results weren't stellar - revenue fell 2.2% short of analyst estimates at CA$18m, although statutory losses were a relative bright spot. The per-share loss was CA$0.11, 13% smaller than the analysts were expecting prior to the result. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the eight analysts covering Copperleaf Technologies are now predicting revenues of CA$103.6m in 2023. If met, this would reflect a substantial 36% improvement in sales compared to the last 12 months. Losses are forecast to balloon 23% to CA$0.45 per share. Before this earnings announcement, the analysts had been modelling revenues of CA$113.3m and losses of CA$0.50 per share in 2023. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for next year.
The consensus price target fell 27% to CA$7.71, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Copperleaf Technologies at CA$12.00 per share, while the most bearish prices it at CA$4.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 28% growth on an annualised basis. That is in line with its 27% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. So it's pretty clear that Copperleaf Technologies is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Copperleaf Technologies going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Copperleaf Technologies you should be aware of.
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